Purchasing Assisted Living Facility During a Pandemic?

[Loren Neufeld]

In January I purchased a 10% stake of a 15 bed assisted living facility with the intent of a complete purchase during the summer. This approach was taken due to the RCFE state licence transfer rules; making the transfer as fast/smooth as possible. This is/was a great opportunity with solid business history, stable staff, and administration in place then Covid 19 hit. The plan was for the seller to carry the note and we have a verbal agreement regarding a purchase price based on an appraisal that was done. The verbal agreement was due to RCFE state regulatory rules that kick in when a formal offer has been made and accepted. In the last few months the industry has entered a period chaotic conditions filled with fear and safety concerns. Nation wide occupancy is down including at the facility where I'm invested and operating costs are up from the new protocols and PPE requirements. With all that said, that effects NOI and industry viability in a way that's hard to project. I would still like to purchase the property and feel that eventually things will get back to normal and the "silver tsunami" will eventually arrive as this is an essential service in our society.

QUESTION PORTION:

Should I ask for a reduced purchase price due to Covid related risks?

Is this just a bad idea all together?

Any advice on this subject would be extremely helpful!  Thanks in advance!